Sponsor
Brendan Francis Boyle
Representative · D-PA
Representative · D-PA
The bill raises taxes on high earners and tightens tax rules to shore up Social Security and Medicare financing and reduce avoidance, while imposing higher tax burdens on wealthy and some middle-income taxpayers and adding compliance and withholding complexity for employers and filers.
Seniors, retirees, hospitals and taxpayers: the bill raises dedicated revenues for Social Security (OASI) and Medicare (HI) by expanding FICA coverage, adding a 1.2% Medicare surtax, and taxing certain investment/foreign income, strengthening the long-term financing of these trust funds.
Wealthy taxpayers and multinational owners: the bill broadens the tax base (including certain foreign income) and prevents deduction of the new additional Medicare tax, reducing avoidance opportunities and keeping taxable income calculations more consistent.
Taxpayers and employers: the bill clarifies and corrects cross-references and adds successor-employer rules that improve tax-collection mechanics and reduce some administrative uncertainty and gaps in contributions.
High earners and many middle-income households: employees and self-employed people with incomes above the thresholds will face higher payroll/Medicare taxes (including expanded FICA coverage up to $400k and a 1.2% HI surtax), reducing take-home pay and increasing overall tax burdens.
Investors and some business owners: higher taxes on investment and certain foreign income (with top effective rates noted up to ~17.4%) can substantially raise tax bills and may discourage investment or complicate business tax planning.
Employers and small businesses: new withholding rules and successor-employer responsibilities increase payroll withholding complexity and potential liability, raising administrative costs and compliance risk for firms.
Based on analysis of 4 sections of legislative text.
Raises payroll and self-employment Medicare taxes for high earners, treats wages up to $400k as Social Security-taxable in certain years, and increases the NIIT for very high‑income taxpayers.
Official title: To amend the Internal Revenue Code of 1986 to increase funding for Social Security and Medicare.
Introduced May 8, 2025 by Brendan Francis Boyle · Last progress May 8, 2025
Imposes new higher-rate payroll and Medicare-related taxes on high earners and raises the net investment income tax for very high‑income taxpayers. It treats wages between the Social Security wage base and $400,000 as subject to Social Security taxes when the statutory base is lower, creates an extra 1.2% Hospital Insurance (Medicare) tax on wages above specified thresholds, adds a parallel 1.2% Medicare self-employment tax on high net self-employment earnings, and instructs amendment of the 3.8% net investment income tax to impose an additional surtax on very high‑income filers. The bill phases and coordinates thresholds, updates withholding and employer protection rules, and takes effect for remuneration, net earnings, and taxable years beginning January 1 of the first calendar year after enactment.